Local Community Groups Rally To Tighten Payday Lending Interest Rates

Supporters of a bill that reform payday lending gather at the Ohio Statehouse.

Andy Chow
/ Ohio Public Radio

Several community groups rallied to show their support for a bipartisan bill they think is needed reform against predatory lending.

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The bill would cap the interest rate of payday lenders at 28 percent and close any loopholes around that cap.

In spite of previous reforms, some of those loans have interest rates approaching 600 percent.

Marsha Mockabee of the Urban League of Greater Cleveland recognizes the role these payday lenders can play.

“But what we’re calling out is it has to be fair used in a way that is not predatory lending,” Mockabee said.

The bill was introduced earlier this year but has yet to have a hearing. A Pew Charitable Trusts study earlier this year found 1 in 10 adults has taken out a payday loan from the more than 650 operators in Ohio.

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New rules issued this past week by the federal Consumer Financial Protection Bureau are meant to rein in payday and auto title lenders. The rules require enhanced credit checks for some loans and cooling off periods after three loans in a row to a single borrower.

Nearly nine years after state lawmakers passed a crackdown on payday loan businesses and voters upheld that law, people are still borrowing from quick-cash lenders, and they’re still charging huge interest rates. Now another proposal to regulate the industry is back before legislators.

The issue of faith comes into state politics in issues such as abortion and health care. But faith leaders came to the Statehouse on Wednesday to speak out on another issue that hasn’t seen much action in nearly a decade: Payday lending.

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